5 tips for those who end up owing the IRS

Tax season has been well underway now for a few weeks or so. Tax returns must be filed by April 15, which might seem like enough time to get your taxes squared away.

However, if you’ve been paying attention to the news as of late, then you know the Republicans’ “Tax Cuts and Jobs Act” has taxpayers all over the United States upset.

A Quick Recap

In December 2017, President Trump and the GOP successfully passed the “2017 Tax Cuts and Jobs Act” (TCJA).

As is par for the course, the Republicans sold this bill to their base with promises of “tax cuts” and added jobs.

Much of the bill is designed to give tax breaks to large businesses and corporations.

The age-old argument posed by Trump and his GOP is that by giving businesses tax breaks, they would be more apt to hire more employees or at the very least give the old employees some raises.

But as is the case each time politicians give major tax breaks to big corporations, the leaders of these companies use the tax breaks to increase their own salaries.

Trump Giveth and Taketh

On top of that, fewer taxes were taken out of people’s salaries, resulting in bigger paychecks.

The problem is that tax filers who have already received their tax returns (or tax bill in a lot of cases) found they received far less back this year than in 2018.

If that wasn’t bad enough, many additional tax filers discovered that they actually owed the IRS because of TCJA.

According to CNBC, those who ended up owing the IRS money this tax season most likely didn’t know that the IRS and Treasury had adjusted the withholdings table after the new tax bill was passed.

If you’re one of the many Californians who owe Uncle Sam this year, you’re going to know what and if anything can be done.

Further, owing the IRS when you never expected to can place a hardship on you. Will you decide to challenge the tax debt or try to work out a payment plan?

Here are a few things to consider.

You Can Contest the IRS

Though it’s a federal law that everyone living or operating a business in the United States must pay taxes, if one feels the tax bill is incorrect or unfair, they can contest it.

However, challenging the IRS head-on is no small task. The IRS is most likely one of the most powerful governmental institutions in the United States.

As a matter of fact, various presidents throughout America’s history have used the IRS as a political tool or as a form of revenge against people, groups, or companies they had issues with.

With that said, before you decide to challenge the IRS, it’s suggested that you hire a California tax attorney with the experience needed to defend your rights.

How to Handle a Notice of Deficiency

One of the most common communications the IRS has with taxpayers is a Notice of Deficiency(known also as an IRS 90-day letter).

These letters can come from other government offices as well, but mostly it’s the IRS that sends them.

An IRS 90-day letter is usually sent to an individual to let them know that the IRS has found they owe back taxes, interest, and penalties.

As soon as you know the letter you just received is an IRS 90-day letter, it’s critically important to have a tax attorney respond on your behalf in a prompt manner.

Determine If You Owe the Money or Not

One of the jobs of a tax attorney is to assist you in figuring out whether or not you owe what the IRS claims.

It’s vital to know if you missed some income that you forgot to claim.

In addition to that, it’s not sufficient to think you declared any extra income because once you start the process of challenging the IRS, you will be underneath a microscope.

Even if you found that you did miss something, you might decide to fight it anyway.

But understand that for every passing day, the IRS is charging you interest on the supposed debt. You should know very early on if you have a strong case or not.